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Marketing strategies which can help Cadburys in launching there new product

Cadbury

Background

In 1824, John Cadbury began selling tea, coffee, and drinking chocolate, which he produced himself, at Bull Street in Birmingham, England. John Cadbury later motivated into the production of a variety of Cocoas and Drinking Chocolates being manufactured from a factory in Bridge Street, supplying mainly to the wealthy due to the high cost of manufacture at this time. At this time the company was known as 'Cadbury Brothers of Birmingham'.

Cadbury is a leading global confectionery company with an outstanding collection of chocolate, gum and candy brands. Cadbury employ around 45,000 people and has direct operation in over 60 countries, selling its products in markets everywhere around the world. Cadbury is nearly 200 years old. In 1969 Cadbury merged with Schweppes to create Cadbury Schweppes. In 2003, Adams Confectionery was acquired including its Trident and Halls brands, now respectively the world's largest gum and candy brands. On 7 May 2008, Cadbury demerged the Americas Beverages business and created Cadbury plc. In March 2009, they announced a definitive agreement to sell the Australia Beverages business for approximately £550 million.

The following few pages which follow help to show overall how and which types of strategies on various things based on Marketing strategies can help Cadburys in launching there new product. Marketing strategy is a plan of action which is used by many businesses around the world, which helps the business meet its aims and objectives, it can also assist a business when launching a new product as it helps to identify which different strategies would be best to use. Marketing strategies can be split into two main categories which are:

  • Short-Term
  • Long-Term

Short-term strategies help a business to focus mainly on the four Ps: Product, price, place and promotion which are vital to all businesses, as these four features are the main things which help a business to achieve objectives if they are used correctly. On the other we have long-term strategies which are used to plan the future actions of a business, this can include producing tables such as a Ansoff matrix which helps a business to decide on many things such as, whether to launch a new product or to improve previous products, overall making the right decisions on which type of strategy to use is vital, especially in the case of Cadburys as it helps to decide how to launch a new cereal bar, to ensure that they reach maximum sales. Throughout the next few pages I will discuss possible short-term and long-term strategies which Cadburys could use, indicating which type of strategy in each case would be the most useful to help them achieve success with there new product. Ansoff Matrix

An ansoff matrix can be used to identify and show various types of growth strategies, many firms such as Cadburys could benefit from the use of an ansoff matrix as it helps to focus on the firm's present and possible products as well as the markets. The main thing in ansoff matrix helps to identify is possible ways for a business to grow; this can include improving previous products or producing new products.

Diversification

Market Penetration: This is when a firm tries to achieve growth using existing products in there current market segment, to try and increase its market share.

Product Development: This is when a firm targets a new product at there current market segment.

Market Development: This is when a firm seeks growth by targeting there existing products at a new market.

Diversification: This is when a firm tries to diversify into new businesses by producing new products to aim at a new market.

Best marketing strategy for Cadburys: The following list helps to show which marketing strategy from the ansoff matrix would be best for Cadburys to use:

  • If Cadburys was to use market penetration for there product, I feel this would not help at all as the current product they have out in the market which is the Brunchbar, is not doing very well and people would not buy it, so I feel this would be the worst option to choose.
  • If Cadburys was to use product development for there product, I feel this could possibly be successful, although after the failure of there previous product people may not buy there new product.
  • If Cadburys was to use market development, I feel that again there could possibly be a chance of success, as they may have aimed there previous product at the wrong market, although people from the new market may also not be keen to buy there product.
  • It is clear that if Cadburys was to use diversification and aim a new product at a new market, there would be a high chance of success as long as the new product was to meet customer needs, which can be done through extensive market research to help gather an idea of people who would regularly purchase there product.

Marketing Objectives

Before a business such as Cadburys can decide on which market strategy they will be using, they must take into consideration that correct and precise marketing objectives are set to help the business to become as successful as possible in the future. The best way for a business to

ensure that they set realistic and achievable objectives would be by following the acronym of SMART, this helps identify points which need to be checked by a business to make sure high-quality objectives are being set to maintain high sales for the product.

The acronym SMART is short for the following which all need to be checked over by businesses when setting its marketing strategy:

  • Specific
  • Measurable
  • Achievable
  • Realistic
  • Timed

For a business such as Cadburys to be successful within such a competitive market, good quality objectives must be set.

The following is a list of objectives Cadburys could set themselves to ensure that they are successful with the launch of there new product:

Principles of Marketing

There are many different features to be looked at when marketing your product to ensure there are no hiccups when releasing a new product. The following are a list of different things which need to be looked at by businesses such as Cadburys to ensure success for the new product:

  1. Understanding customer needs: This can be found through extensive market research to help the business determine the customers outlook on products and also the new tendency within the market. Through my market research which I have conducted, I have now found the correct segment for me to aim my product at helping to almost ensure success with the new product as I have covered the needs of my chosen segment.
  2. Understand and keep ahead of competitors: This again can be done through market research to help a business stay above competitors. I have used secondary research here to help me see the biggest rivalries within the market, therefore enabling me to stay above them.
  3. Communicate effectively with customers: This can be done through varieties of places; the most affective would be through promotional techniques used by the business. To ensure I have done this, I listed the possible promotion techniques and chose the ones which I felt would be best to use.
  4. Organize functions to achieve objectives: To ensure correct objective have been set, a business must look at the four Ps around the product to make certain that the correct marketing objectives have been set. To help me do this I ran through the four Ps of my product, and then checked to see that I had stated most of the possible strategies for the product.
  5. Aware of constraints: All businesses must be aware of the constraints they face on there marketing activities, to ensure that they are then able to work there way around it. To ensure I was aware of the possible constraints from many different factors, I produced both a SWOT and PEST analysis to help me identify these.

The above principles of marketing must all be looked and analyzed by businesses, to ensure that the launch of the new product runs as smooth as possible.

Cadbury plan their production process by using a time series method as this helps Cadbury to accurately produce the needed amount of chocolate at the correct period of time. A time series shows historical data that can be used and analyzed to predict future trends. Christmas and Easter are peak selling times for all chocolate manufactures including Cadbury; this is obviously because chocolate products make good gifts for these occasions. The disadvantages of this type of forecast are:

- Cadbury needs to have a lot of past data in order for the time series method to be used accurately to predict sales figures.

- If the external environment doesn't stay stable then there will be problems with the forecast for example if the prices of the raw materials used to produce Cadbury products increases then the price of the product has to increase in order for Cadbury to make a profit from

the product produced. This may affect the customers purchasing trends.

- The data may be biased or representative.

The advantages of this type of forecast are:

- The data helps Cadbury to reduce wastage and produce the amount of products that customers would purchase.

- The data is reliable if collected properly/accurately.

- The forecast helps Cadbury to make products efficiently as it helps Cadbury to set a target of the amount of products needed; there are always enough products to supply to customers.

However precise information about this is not available to the public. Therefore I am going to use the information that I have produced about an imaginary firm I have used in E4 of my assignment.

The most profitable product that the imaginary firm produces is the mugs, making a profit of £10,500 for the first quarter of the year. I think that this is excellent as this firm is selling the mugs well and making a reasonable amount of profits from them; the mugs are batch

produced and are everyday household objects.

- The firm does some research and find out what types of designs the customers are interested in purchasing. This would help to increase the sales, as customers like to have mugs with designs that they like and match with the rest of their kitchen accessories/items. If the

firm shows that they are interested in giving the customers what they want then customers are very likely to purchase mugs from the firm. But a problem that would arise is that customers don't need too much mugs as they can be reused again and again so at some point the firm

will need to stop producing mugs and withdraw it from the market as the demand will decrease.

- The firm could sell the mugs in multi packs as a set as well as individually and this will help to increase the sales of the mugs as most customers prefer to have a set of mugs the same design.

From the figures of wastage and production I suggested that the saucer department of this firm should be closed down as it was costing the firm too much to continue to produce saucers to sell to the customers as it was not making its potential profit. The department that I suggested should have an increase in production was the teapot department this was due to the fact that it was the second most profitable product that this firm produced (along with the saucers but I have explained why it wasn't possible for the firm to continue to produce them). I think that if the firm improved the strength of the teapots then they would be more successful in the market as customers would realize this and want a teapot that is strong so it lasts longer.

How the production process is monitored

The quality assurance system that Cadbury use is total quality management (TQM). For Cadbury's TQM is a method of ensuring that their products are of a high standard of quality and a method to monitor the production of products.

To monitor the production process Cadbury employs supervisors to inspect the product at each stage of production.

Marketing strategy

In order to increase sales Cadburys needs to undertake a range of marketing activities before deciding upon the best way to encourage the purchase of its product. When identifying the basic principals which Cadburys must apply to its marketing will be its basic objectives because all business must have objectives it allows them to increase sales and make profit.

Corporate aims are the long term intentions of a business, whereas corporate objectives are the specific targets required to achieve the aims.

The common aim and objectives of the corporation such as Cadbury includes the following:

  1. Survival
  2. Profit maximization- which is often taken to be the reason why firms exists and to be the primary objectives in practices most firms have a hierarchy of objectives when a firms survival is threaten it may profit maximize in order to restore its financial health.
  3. Growth- which includes Cadbury selling new products or expanding overseas.
  4. Diversification- which is the spreading of business risks by reducing dependence on one product.
  5. Sales maximization- which is the increasing of sales
  6. Improving the product image-which includes creating a new logo or launching a new brand of product and creating more attractive packaging. For example, Cadbury set out two objectives for the development of their chocolate, Fuse. These were:
    1. To grow the market for chocolate confectionery
    2. To increase Cadbury's share of the snacking sector when launching a product the company Cadbury's had to make sure that any new product in the snaking sector must establish points of difference, creating a unique selling proposition (USP) i.e. a product with unique appeal which is not shared by any of its competitors. Referring back to the example of Fuse, Cadbury lost a lot of money testing out the combination of various ingredients and more than 250 were combined before the recipe of the chocolate was finalized. As the products are developed, Cadbury tests them to ensure that consumers are willing to buy them. Cadbury then promotes its products in various ways such as the use of above the line promotion, which is where a product is advertised through consumer media such as television, magazines, newspapers and radio.

4ps

Product

My product is a re-launch of Cadbury dairy milk. Cadbury dairy milk is made from real chocolate. Its ingredients include cocoa butter and there is a glass and half full cream dairy milk in every 200 grams of Cadbury dairy milk chocolate, Cadbury buys 65 million litres of fresh milk each year to make Cadbury dairy milk chocolate.

Price

Price is an important element of the marketing mix. The price charged for a chocolate bar can determine whether a consumer will buy it and the level of sales achieved can determine whether or not Cadbury Schweppes will make a profit. Price is also affected by factors such as the state of the economy, what competitors are charging, the stage reached in the products life cycle and above all what price the market will bear. From the marketing point of view this is what matters.

Place

Cadbury dairy milk is produced at the chocolate factory in Bourneville in Birmingham. After the chocolate is produced and has undergone all the quality checks it is transported to the stockrooms. After this Cadbury sells it products to shops

that deal with beverages and confectionery e.g. corner shops, super stores such as Iceland, Sainsbury, Kwik save, Tesco, Asda, Safeway and petrol station. These businesses are usually visited by customers on a daily basis. They then sell it to the general public. Cadbury produces chocolate for more than 200 countries so that they have a chance to enjoy it as well and make profit.

This gives them a wide range of consumers around the world. Cadbury Schweppes therefore makes sure that the cultures of these different people are kept. They can do this by producing products, which are eaten in that particular country without upsetting religious or cultural practices.

Promotion

The purpose of promotion is to communicate directly with potential or existing customers, in order to encourage them to purchase dairy milk and recommend it to others. The main promotional tools are sales promotions, public relations and advertising.

Production representation

Cadbury monitor the production process by using total quality management to ensure that the chocolate/products that are produced are of a high quality and meet the needs of the customers, this is vital for Cadbury because they produce chocolate products mainly which has a lot of substitutes, this means that customers could loose interest in Cadbury products if their demands are not met or thought about. To enforce total quality management Cadburys have supervisors that monitor the machines, the other workers and the products that are made. Cadbury also monitor the quality of their products by using a quality assurance system, (mentioned above) total quality management TQM. TQM ensures that the products that Cadbury produces tastes good to the customers, is appealing to the customers, customer complaints are solved, listening to customers and Cadbury make continuous improvements to their products. Those are all the benefits for Cadbury monitoring the quality of their products and using a quality assurance method. At the moment Cadburys use TQM to monitor the quality of their products and as a quality assurance method. I think that this could be

improved if other methods of quality assurance and monitoring production were used; I think that this would help to improve them. An alternative quality assurance method that Cadbury could use is benchmarking. Benchmarking is a method for comparing the performance of one business against another, this would of an advantage to Cadbury because they could compare their sales figures, production figures etc against a major competitor (Nestle for example), the comparisons would help Cadbury to set aims and goals for the business itself and once the aims have been met it may almost be certain that Cadbury is outperforming its competitor. However the competitor that Cadbury choose has to be near enough the same size business as Cadbury, this is to make the benchmarking fair. As well as the above benchmarking will help Cadbury to do better than their competitor(s). To improve the monitoring method that Cadbury could use to monitor their products, Cadburys could continue to use total quality management ? TQM and also give all the other workers more responsibilities by enforcing self-checking and inspection on the products produced at Cadbury. Self- checking is traditionally the main method of a business to achieve quality control, to ensure that the workers inspect the products professionally, correctly and properly Cadbury should make a list of things that the workers should check.

In 1895, an innovation in the provision of model housing by manufacturers occurred with the development by George Cadbury of Bournville Model Village. This was the first model settlement to provide low-density housing not restricted to factory employees. This paper uses the Bournville archives to explore the accepted history of this settlement. It is argued that the accepted history is a particular reading of this planning experiment. The paper explores the construction of the ‘accepted history', identifies some of the authors behind the history and uses the minute books and secretary reports of Bournville Village Trust to construct an alternative historical narrative. The alternative history is one in which Bournville begins as a building estate rather than as a model village. The building estate was provided with no community facilities, and the houses were targeted at the lower- and upper- middle classes. Cadbury repackaged the building estate by appropriating the garden city movement; in return the garden city movement also appropriated Bournville by using it as a working example of a model garden village.

The paper makes a contribution to theoretical debate by linking a literature from organizational studies concerned with story-telling and construction to historical geography.


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